3) IF the new 3G phones are coming this positions the pricing much much better. Apple always seems to strive to rational pricing structures for its product line.

Yes it does.

I would expect that Apple looked at the iPod Touch pricing, they looked at the current sale rate of iPhones, and the expected introduction of better iPhones, and worked out what they HOPE is the sweetspot for selling the current phones at a rate that keeps up some great momentum AND once the new phones are added will result in a smooth transition to 2 new models (or whatever).

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Originally Posted by Ireland

Yeah, and that's not even including iPhone nano
Which is pretty much a given, and a certain multiple-million seller.

Didn't he say 1% of the smart phone market was 10million?

I'd guess that an iPhone Nano would be looking for its own 1 or 2% of the regular cell phone market?

"He said the company expects to sell about 10 million of them next year, which would account for 1 percent of the 1 billion cell phones sold each year around the world."

You think the slide he put up at the introductory keynote was a slip?

Not 10 million by the end of 2008, "10 million IN 2008".

Believe it yet?

Thanks for posting that - it seems pretty clear what SJ meant "1% of a 1B Unit market = 10M Units/year", and Apple's goal is to achieve that in 2008.

- I was beginning to get annoyed with all the speculation about what Apple's goal actually was!

And, just to add my penny's worth, I'd say that it seems a pretty realistic target
- since by then, they'll have Europe & Asia covered, and, who knows, perhaps a new model (or perhaps that was the $399 iPhone)

3G and 16gig soon, that's all I want on the iPhone. Sure 32gig would be nice too , but that will take longer.
I hope before the end of the year to see such iPhone.

32 Gig depends on Samsung. They had a 40nm flash a while back but currently their at 50nm for production. Since the big players are moving to 300-mm wafers that's good for a couple jumps.

Maybe this time next year we'll have yet another generation of flash. Toshiba and SanDisk had to take a step back to 56nm vs 52nm. It ain't likely they're going to leap to 45nm or 40nm to give us 32 G-bit NAND. Intel might but I don't really see them using their 45nm fabs for NAND.

Well, at the rate they're going right now (1 million iPhones in ~74 days), that equals about 4.9 million iPhones in 2008. They better step it up a lil bit, dropping the price was a good start, but what's next?

Yah, but what's the slope? The price drop should help. The next step is both the 8GB and 16GB iPhones on the new flash from Samsung probably at the same time they do 3G.

Heh...want to hear the screaming if they drop the 8GB EDGE model in favor of 8GB/16GB 3G only? Apple better have a trade up for half price policy.

And, I should have added in responser to TenoBell's post: Can you imagine the possibilities if Apple teams up with Google to bid!!

I'm not certain how Google is going to monitize that investment...I think that Google will bid but it got what it wanted with the device neutrality thing. So my inclination is that Google will do a mid level bid and if it gets spectrum great but otherwise not bid to win.

I'm not saying it hasn't sold well... just that it isn't selling as well as iSuppli tried to make it seem like.

Their flub was pretty silly, actually. Even selling half as much as the entire Blackberry line (as was really the case) is quite good for a newcomer, as Apple is to this market. No need to embellish, really.

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edit: The Razr sold a million units in its first 6 months.

The RAZR was like a snowball - it sold well at the beginning (750,000 in the first 3 months) - but FANTASTIC after awhile.

I'm not saying it hasn't sold well... just that it isn't selling as well as iSuppli tried to make it seem like.

Their flub was pretty silly, actually. Even selling half as much as the entire Blackberry line (as was really the case) is quite good for a newcomer, as Apple is to this market. No need to embellish, really.

The RAZR was like a snowball - it sold well at the beginning (750,000 in the first 3 months) - but FANTASTIC after awhile.

That's why the "50 Million Sold" monicker doesn't faze me. The two phones, and companies making them, couldn't be more different.

I kind of doubt Apple will be able to sell 50 million iPhones in its first two years. The ATT exclusive in the US works against that, the staggered worldwide launch does as well.

But I have no doubt that Apple will avoid running the iPhone into the ground the way that Motorola did the RAZR. Apple is very good about protecting its brand and its products, and is much better at software than Moto.

The iPhone is going to be much longer-lived as a strong brand/product than the RAZR.

I kind of doubt Apple will be able to sell 50 million iPhones in its first two years. The ATT exclusive in the US works against that, the staggered worldwide launch does as well.

But I have no doubt that Apple will avoid running the iPhone into the ground the way that Motorola did the RAZR. Apple is very good about protecting its brand and its products, and is much better at software than Moto.

The iPhone is going to be much longer-lived as a strong brand/product than the RAZR.

.

Where did you get that from me? I'm not saying that at all.

That number was in response to the 50 million number brought up about RAZR sales. I merely stated why Moto was able to get to those numbers in the earlier post.

My reply to you was in response to your reason for what happened to the RAZR, and it's lack of profitability. I was pointing out that Apple wouldn't respond the way Moto did, by lowering prices to commodity levels.

I in no way hinted that Apple would sell that many in two years.

If Apple plays its cards right, with features, new models, and proper pricing, they COULD reach that number in four years, as some of those sales will definitely come from iPod buyers.

I bet I could start a thread saying Apple WILL sell 50 million iPhones in two years, and a lot of ppl would agree with me, even though I don't believe they will at all.

I wouldn't agree with that. There was also a great deal of exubernace in those arguing that the iPhone would not do well without 3G. Yet it has. I agree they need to get 3G as soon as they can. But its not like the pro 3G side was inherently more rational.

I wouldn't agree with that. There was also a great deal of exubernace in those arguing that the iPhone would not do well without 3G. Yet it has. I agree they need to get 3G as soon as they can. But its not like the pro 3G side was inherently more rational.

The 3G side was more rational, frankly. There was no hardware in the iPhone for 3G, yet some ppl kept on insisting, "Apple can just wake up the functionality with a software update!" Uhh... no, you can't. You need the 3G radio chip. Software won't make one automagically appear. \

The FCC approval was for an EDGE device, not a 3G one, and ppl were STILL saying "It could be 3G, it could be 3G!". Again, uh, no. No FCC approval for it means, no, you can't sell it.

Far as how well the iPhone is really doing, it's hard to say. We have analysts like iSuppli predicting pie in the sky things for iPhone sales. On the other side of the coin, the stock got hammered by investors after the price cut, who feared that the price cut was a signal that iPhone sales really 'weren't all that' at the $600 price point. Some analysts agreed that it was indeed a bad sign.

Overall, the truth likely lies in the middle. Putting the launch aside (which was phenomenal, Apple built up the hype perfectly), day-to-day iPhone sales are good, but prolly not quite as high as what Apple really wants. Otherwise, why such a huge, early price cut?

Sure, some of it has to do with avoiding having the iPod Touch cannibalize sales, but let's get real... Apple is not exactly known for this kind of behavior. Its usally been about MAINTAINING prices with them no matter what, not being on the bleeding edge of the price war.

In other words, the iPhone is doing pretty well, but with 3G it could be doing even better. Apple knows this, which is why we're going to be seeing a US 3G model sooner rather than later... certainly no later than one year after the iPhone's launch, worst-case.

In Europe of course, the '3G-less' window for the iPhone will be even shorter, perhaps there'll be none at all. And in Asia, Apple will have to have 3G right from launch... because the alternative will look something like the Hindenburg.

It's not about rationality, it's about recognizing what the market will bear. The US market will bear 2.5G tech in a high-end, massively web-centric phone, but only for a short time. Europe? Shorter still. Asia? Not at all.

The 3G side was more rational, frankly. There was no hardware in the iPhone for 3G, yet some ppl kept on insisting, "Apple can just wake up the functionality with a software update!" Uhh... no, you can't. You need the 3G radio chip. Software won't make one automagically appear.

I think you are making too much of this. It was speculation. As we all speculate as to what Apple will do all the time.

I'm not sure if you are pointing this comment strictly towards me. But I did raise the "speculation", that Apple could have latent 3G in the phone for later activation. Based on the precedent with 802.11n. My point was that this was something Apple could do, I never said I absolutely knew 100% for certain they were.

Unless there was a whole different discussion that I was not apart of, no one had any real information to confirm or dispute this hypothesis. At the time I don't remember anyone bringing up the official FCC documentation. Now its easy to look in hindsight and say that was silly - at the time no one knew.

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Far as how well the iPhone is really doing, it's hard to say

No its not. Apple projected a million units by September quarter and that goal has been met. Not only met was the fastest selling phone at its price range.

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Otherwise, why such a huge, early price cut?

Jobs explained the price cuts. Economy of scale has brought down the price of manufacture. As the iPhone and iPod Touch use many of the same components. And Apple will take less profit to be aggressive for Christmas.

Why do the price cuts have to be early? Who officially set a time for a company to cut the price of its product? Who complains that a company has cut the price of its product?

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In other words, the iPhone is doing pretty well, but with 3G it could be doing even better.

Which is of course your whole point. Which you will defend against any other rational.

Overall, the truth likely lies in the middle. Putting the launch aside (which was phenomenal, Apple built up the hype perfectly), day-to-day iPhone sales are good, but prolly not quite as high as what Apple really wants. Otherwise, why such a huge, early price cut?

The truth is always in the middle. However, as TenoBell pointed out they met their sales goal for 1M units. The price drop should increase sales so they can reach their 10M goal by 2008 (in, middle, end, whatever).

Margins on the phone were high and with the expected rev 1.1 (8/16GB) with the new NAND the component cost on the 8GB should drop too.

Probably Samsung's issues with the new NAND forced two things: no launch price drop and no 16GB model at launch. They had been saying March/April mass production and they missed by a couple three months. They made it in time for the iPod touch.

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Sure, some of it has to do with avoiding having the iPod Touch cannibalize sales, but let's get real... Apple is not exactly known for this kind of behavior. Its usally been about MAINTAINING prices with them no matter what, not being on the bleeding edge of the price war.

Eh...when the 16GB model comes out at $499 the sales will likely be mostly at that $499 mark. $399/$499 for a phone isn't what I'd call bleeding edge of a price war.

Jobs explained the price cuts. Economy of scale has brought down the price of manufacture. As the iPhone and iPod Touch use many of the same components. And Apple will take less profit to be aggressive for Christmas.

Why do the price cuts have to be early? Who officially set a time for a company to cut the price of its product? Who complains that a company has cut the price of its product?

Why do the price cuts have to be early? Who officially set a time for a company to cut the price of its product?

I think Apple cut the 8GB iPhone price BECAUSE the 4GB iPhone was selling worse than expected.

Apple underestimated how many people were willing to pay $100 more for more memory (but they were able to adjust their orders/production easy enough - after all it was just a change to one chip). So now Apple is thinking about their 16GB model... and realising that the 8GB will be -relatively- unpopular.

So what do they do? In anticipation of the demand for 8GB dropping significantly, if it's possible they just modify their production for less 8GB & more 16GB. But I suspect that the 16GB is made to a different design (ie: 3G!!) and the production change is not so easy (it may even be different companies making it).

Option
1) When the 16GB(3G) comes out, drop the price of the 8GB enough to keep demand happening and to sell all the 8GB phones as quick as necessary before releasing a 3G-8GB phone
2) Leave it as is, or do a slight price drop. If the 8GB(2.5G) isn't popular enough when the 16GB(3G) comes out, then dump it on the market at a very low price.
3) Drop the price of the 8GB phone significantly now (but still make a profit on it). The goal would be to increase sales of the 8GB(2.5G) significantly so that even when the 16GB(3G) is released and 8GB sales drop, they'll sell out of 8GB(2.5G) without dumping on the market (and can release an 8GB/3G phone on schedule)

I think you are making too much of this. It was speculation. As we all speculate as to what Apple will do all the time.

I'm not sure if you are pointing this comment strictly towards me.

It's not just you. Several ppl joined you in the piece of speculation, including Robert Cringley, of all people.

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But I did raise the "speculation", that Apple could have latent 3G in the phone for later activation. Based on the precedent with 802.11n. My point was that this was something Apple could do, I never said I absolutely knew 100% for certain they were.

Unless there was a whole different discussion that I was not apart of, no one had any real information to confirm or dispute this hypothesis. At the time I don't remember anyone bringing up the official FCC documentation. Now its easy to look in hindsight and say that was silly - at the time no one knew.

Sigh. Look, the whole 802.11n precedent was off from the beginning. The chips already IN the MacBooks in that case were compatible with the new technology. 3G was totally different. A software update can't make an EDGE chip do HSDPA... you need a whole different chip in there.

That's what ppl were saying to you and others back then. And you managed not to listen every time, somehow. \

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No its not. Apple projected a million units by September quarter and that goal has been met. Not only met was the fastest selling phone at its price range.

That's only one milestone, and the easiest one to make. It's good, but it's also no sign of long-term success. It mainly says, "Hey, we had a good launch." Great. But the hype machine had a lot to do with that too.

The more important goal is, will Apple be able to sell 10 million iPhones in 2008? That's still TBD. And obviously, investors are not sold on the iPhone being a coronated success, what with the massive hit the stock took after the price cut announcement.

Apple still has work to do to ensure the iPhone being a success. Part of that is getting 3G in soon.

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Jobs explained the price cuts. Economy of scale has brought down the price of manufacture. As the iPhone and iPod Touch use many of the same components. And Apple will take less profit to be aggressive for Christmas.

Now, do you honestly expect Steve to say, "Uh, well, the iPhone isn't quite meeting our internal sales projections after launch, so we felt the price cut was necessary."

He does that, and within hours everyone is screaming, "Fire sale!". Just not gonna happen. The reasons he gave were reasonable, and likely part of the truth, but the whole truth? Hmm....

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Why do the price cuts have to be early? Who officially set a time for a company to cut the price of its product? Who complains that a company has cut the price of its product?

Hey Teno, I'm far from the only one who was shocked at how early and deep those price cuts were. Read most any news story from that day. Read analyst commentary. Or better yet, just look at what the stock price did.

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Which is of course your whole point. Which you will defend against any other rational.

Don't know that it needs much defending, it seems to be true... especially judging from the fact that Apple should have 3G in the iPhone no later than one year after the US launch, perhaps much sooner... as compared to the two years or more that you speculated back then.

Teno, some things are just settled arguments. That Apple needs 3G on the iPhone is one of 'em. The launch glow is fading in the rearview mirror as we speak. I'm sure Steve realizes this.

I'm sure the price drop helped sweeten the deal. I don't see evidence Apple would sacrifice its normal profit to lower the price.

I don't totally believe the reports about Apple having so much trouble selling the iPhone to European carriers. I can believe Vodaphone like Verizon balked at the offer. They are probably the smart ones because they can see Apple is undermining their business model.

Over at C-Net there is an interesting article about how AT&T is living with Apple countering its ability to charge for extra phone services.

Sigh. Look, the whole 802.11n precedent was off from the beginning. The chips already IN the MacBooks in that case were compatible with the new technology. 3G was totally different. A software update can't make an EDGE chip do HSDPA... you need a whole different chip in there.

If I'm sighting 802.11n as a precedent, why would you assume I think Apple is going to magically make one technology act like another with a simple firmware update? Why would you not assume that the 3G speculation would happen exactly the same as the 802.11n example that I am sighting.

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That's only one milestone, and the easiest one to make.

Apple can only reach one milestone at a time. It wasn't only marketing, the iPhone sold because it works as Apple described it would work.

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investors are not sold on the iPhone being a coronated success, what with the massive hit the stock took after the price cut announcement.

The people on Wall Street are only reacting, they don't know what's going to be successful. If anything they are behind the curve.

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Now, do you honestly expect Steve to say, "Uh, well, the iPhone isn't quite meeting our internal sales projections after launch, so we felt the price cut was necessary."

There is no reason for Steve to say that, because they met their publicly stated sales goal.

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Hey Teno, I'm far from the only one who was shocked at how early and deep those price cuts were. Read most any news story from that day. Read analyst commentary. Or better yet, just look at what the stock price did.

Yes we all were surprised and shocked but there still is no rule as to when Apple should lower the price.

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Teno, some things are just settled arguments. That Apple needs 3G on the iPhone is one of 'em. The launch glow is fading in the rearview mirror as we speak.

The iPhone outsold Palm's entire line, which does have 3G. I agree Apple should get 3G in as soon as they can. But the iPhone has sold well without it.

If I'm citing 802.11n as a precedent, why would you assume I think Apple is going to magically make one technology act like another with a simple firmware update?

Because that's what you SAID, back then.

You kept saying that it would be like the 802.11n situation, that Apple might be able to update the iPhone to 3G via a software update, just like it did with the notebook 802.11n upgrade. However, that was impossible, for technical reasons, which you were told repeatedly, and ignored. Not even sure what you're trying to argue here anymore, frankly.

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Apple can only reach one milestone at a time. It wasn't only marketing, the iPhone sold because it works as Apple described it would work.

The launch sales were marketing and/or a leap of faith, largely, as the iPhone would have no real track record at that point. The majority of sales since then being due to the iPhone being pretty good? Sure. That's kind of my point. Sales momentum won't be maintained through hype, but through functional excellence. So you need 3G, increased storage capacities, GPS, voice calling, MMS, etc.

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The people on Wall Street are only reacting, they don't know what's going to be successful. If anything they are behind the curve.

If that's true, then I guess we have to dismiss the very high iPhone sales projections iSuppli and a couple of others have made as well.

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There is no reason for Steve to say that, because they met their publicly stated sales goal.

Publicly stated goals don't mean much, unless they're fairly ambitious and long-term. Microsoft, for example, had a publicly stated goal to sell 1 million Zunes in the time period from launch 'til June of this year. If they made it (I think they did?), publicly, they'll be high-fiving each other. But privately, they know they didn't do that well. It was just a PR game for public consumption.

It's not exactly the same situation here... actually, I think 1 million iPhones sold is pretty good, it's a much more expensive device than the Zune. But are sales, disregarding the much-hyped launch weekend, really where Apple wants them to be? I'm not sure. 1 million sure sounds like a lot. But half of that is launch weekend. And the world cell phone market is 1 billion units a year.

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The iPhone outsold Palm's entire line, which does have 3G.

Do you mean Blackberry's entire line, which is what iSuppli was saying originally? They later re-stated that, and said that Blackberry's line actually outsold the iPhone 2-to-1:

Still not a bad result for the iPhone though. Even if you did mean Palm, I would try to measure against Blackberry, as they seem to be the real competition in the US smartphone market right now.... Palm is kinda fading. \

And no, Palm's entire line does not have 3G... the Treo 680, for example, is EDGE.

However, that was impossible, for technical reasons, which you were told repeatedly, and ignored.

Exhale......I was talking about 3G chips in the iPhone from the beginning and being activated by software later. Just like "n" in the notebooks.

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The launch sales were marketing and/or a leap of faith

I doubt it, Apple knew how fast the phone was selling while everyone else was guessing. But even if it were leap of faith it turned out to be true.

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Sales momentum won't be maintained through hype, but through functional excellence.

Yes and Jobs addressed this by stating the phone would eventually receive 3G and more functionality through software updates.

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If that's true, then I guess we have to dismiss the very high iPhone sales projections iSuppli and a couple of others have made as well.

Yes because they've all been wrong.

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Still not a bad result for the iPhone though. Even if you did mean Palm, I would measure against Blackberry, as they seem to be the real competition in the US smartphone market right now.... Palm is kinda fading

I meant Palm. But from what I've read the iPhone outsold each individual BB model. It just did not outsell the entire BB line.

Well by that standard a Porsche GT2 is cheap because it's only $180K because the Saleen S7 is $395,000.

Phone-car comparisons don't really hold up that well. A lot more ppl are owning or going to be owning iPhones or Blackberries or N95s than exotic $180K to $395K cars. High-end phones really aren't all that exotic. Supercars are.

Really, the high-end phone market is something like $350 to maybe $900 retail (i.e. w/out contract subsidy), and the iPhone is positioned pretty aggressively in that space now.

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Never mind that the "cutting edge of the price war" for cars is at $10K.

Maybe in China and India it is. For the US, its more like $20K. But of course, that too is a bad comparison, as we'd be talking high-volume midrange cars, like Accord and Camry. The iPhone is a high-end phone, more like a Lexus or Boxster.

If that's true, then I guess we have to dismiss the very high iPhone sales projections iSuppli and a couple of others have made as well.

iSuppli does market analysis. Not buy and sell Apple shares. Apple share prices will go up and down based on a variety of factors.

You can dismiss iSuppli future projections but not their past sales estimates.

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Still not a bad result for the iPhone though. Even if you did mean Palm, I would try to measure against Blackberry, as they seem to be the real competition in the US smartphone market right now.... Palm is kinda fading. \

Not a bad result? Thats damning with faint praise. What more do you want? RIM outsold Apple only 2-1 with the ENTIRE Blackberry line that has enormous enterprise support which Apple lacks. Very limited corporate sales.

How good does RIM look when you eliminate corporate sales?

Heck. Apple just stormed the market with 12.6% US share for smartphone operating systems. How often does Apple see the terms "Operating System" and "12% share" in the same sentence?

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iPhone entered with 1.3% of worldwide share and won 12.6% share in the USA

Exhale......I was talking about 3G chips in the iPhone from the beginning and being activated by software later. Just like "n" in the notebooks.

Yes, I know. And you were wrong. What else is there to say?

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I doubt it, Apple knew how fast the phone was selling while everyone else was guessing. But even if it were leap of faith it turned out to be true.

How do you "doubt" that buying the iPhone on launch weekend is a leap of faith? In my book, its a good leap of faith because I'm an Apple fan, but let's face it... NO track record. Apple has never made a cellphone before (ROKR doesn't count, Motorola made it). No matter how you slice it, yeah, it was marketing plus a leap of faith. It worked out, and I'm happy it did, but that doesn't change what it was.

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Yes and Jobs addressed this by stating the phone would eventually receive 3G and more functionality through software updates.

Which is something I had to repeatedly remind everyone of back then, as they all bought into the RDF that Apple had to simultaneously spew, which is that 'no 3G was no big deal'.

Which they had to say, since they didn't have a product that offered it. Once they do, look out, Apple will be saying 3G is the best thing since sliced bread.

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I meant Palm. But from what I've read the iPhone outsold each individual BB model. It just did not outsell the entire BB line.

That is correct. But BB has a lot more models than Apple, hence their sales are going to be split more ways.

Overall, BB beat Apple pretty handily. But its not like you just walk into the ring and knock out the champ in Round 1. Apple's made a good start, even if they're not yet king of the US smartphone market.

iSuppli does market analysis. Not buy and sell Apple shares. Apple share prices will go up and down based on a variety of factors.

You can dismiss iSuppli future projections but not their past sales estimates.

I dunno... iSuppli seems to be having problems interpreting even basic data lately, judging from their recent 'Apple outsold the entire Blackberry lineup!... oh wait, no they didn't' flub. \

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Not a bad result? Thats damning with faint praise. What more do you want? RIM outsold Apple only 2-1 with the ENTIRE Blackberry line that has enormous enterprise support which Apple lacks. Very limited corporate sales.

Which would seem to be a good argument for Apple to amp up enterprise support in the iPhone, eh?

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Heck. Apple just stormed the market with 12.6% US share for smartphone operating systems. How often does Apple see the terms "Operating System" and "12% share" in the same sentence?

12% smartphone share is a nice start, but bear in mind that smartphones are only about 10-15% of the market to begin with. So Apple appears to have a bit north of 1% of the US market overall (I believe I heard 1.8% somewhere?). Great, it's been a longer-term goal for Apple to get 1% marketshare, worldwide, and it appears that they're beating that pace in the US, at least initially.

But then you have to bear in mind the following:

1- Apple is very likely to find that the US is their strongest market, just as it is for Macs. They NEED to be running well above 1% marketshare here, to balance out markets where they're going to be weaker/less popular/the competition is going to be tougher.

2- The numbers are a bit amped up from the much-hyped launch. Can they stay there going forward? The price cut will help, but they also need 3G and some other features/fixes.

I'm not trying to 'damn Apple with faint praise' as you stated elsewhere. I'm simply maintaining a healthy dose of skepticism... at least until I see an iPhone 2.0 product that fixes most of the weaknesses.

Phone-car comparisons don't really hold up that well. A lot more ppl are owning or going to be owning iPhones or Blackberries or N95s than exotic $180K to $395K cars. High-end phones really aren't all that exotic. Supercars are.

Phone/Car comparisons are just fine when you're making the absurd statement that $400 for a locked phone is on the "cutting edge of a price war". Especially with Symbian trying to push a big chunk of smart phone market into the mid-range price tier.

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Really, the high-end phone market is something like $350 to maybe $900 retail (i.e. w/out contract subsidy), and the iPhone is positioned pretty aggressively in that space now.

Really, the high end car market is something like $35 to maybe $100K retail. Are you really going to tell me that any $40K car is all that "priced aggressively"?

With contract subsidy the Samsung Blackjack is a mere $99 and the Curve $199.

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Maybe in China and India it is. For the US, its more like $20K. But of course, that too is a bad comparison, as we'd be talking high-volume midrange cars, like Accord and Camry. The iPhone is a high-end phone, more like a Lexus or Boxster.

There's a $10K car market in the US. Even 3 years later the Chevy Aveo and Toyota Yaris have 10K models and the Saturn Ion starts at $11K. The Hyundai Accent and Kia Kio is $10K. The base 2008 Aveo is $9,445.

In New York and not Beijing or Calcutta.

And the Boxster is also no where close to price war territory. Find for me any luxury item that is engaged in a price war.

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But again, can you see why phone-car comparisons suck?

No. We're simply talking about price segments and how none of the luxury items are in what you would call "a price war". The iPhone is still priced above that typical $200-$300 point for high end phone buyers given that most phones are free with contract and the Cingular 3125 and Blackjack and Pearl are all $99.

Which would seem to be a good argument for Apple to amp up enterprise support in the iPhone, eh?

No, not any more than a press for the Mac in the corporate environment. It's outside their demographic really.

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12% smartphone share is a nice start, but bear in mind that smartphones are only about 10-15% of the market to begin with.

And the other 90% of the market share is at commodity pricing. Which means from Apple's perspective they don't matter. Why on earth would they try to compete in the volume market any more than they want to compete in the $350 PC market?

RIM only sold 1.4M in Q2 2007. Apple needs to do better than that make their 10M mark by end of 2008.

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2- The numbers are a bit amped up from the much-hyped launch. Can they stay there going forward? The price cut will help, but they also need 3G and some other features/fixes.

Which are coming and everyone knows is coming. Why harp on "Apple must do X by end of 2008" when there's likely a 3G annoucement in the next week or month?

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I'm not trying to 'damn Apple with faint praise' as you stated elsewhere. I'm simply maintaining a healthy dose of skepticism... at least until I see an iPhone 2.0 product that fixes most of the weaknesses.

Skepticism or cynicism? One of the best phone product launches and it's "Not Bad"? Please. Apple can falter but it did awesome with the iPhone launch.

Phone/Car comparisons are just fine when you're making the absurd statement that $400 for a locked phone is on the "cutting edge of a price war".

It's not absurd at all, if you're talking about high-end phones. We are.

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Really, the high end car market is something like $35 to maybe $100K retail. Are you really going to tell me that any $40K car is all that "priced aggressively"?

Yep. Take the Boxster, for example. It is indeed aggressively priced... for a Porsche.

I think the problem you're running into is that you don't see that aggressive pricing is relative to market segment, and are instead seeing things in absolutist terms.

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With contract subsidy the Samsung Blackjack is a mere $99 and the Curve $199.

Yeah... apples and oranges. Apple doesn't subsidize the price of the iPhone. But if they did, they could come close to Curve prices, given the recent price drop.

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There's a $10K car market in the US. Even 3 years later the Chevy Aveo and Toyota Yaris have 10K models and the Saturn Ion starts at $11K. The Hyundai Accent and Kia Kio is $10K. The base 2008 Aveo is $9,445. In New York and not Beijing or Calcutta.

Doesn't matter, honestly. Because the price war you're talking about is for bare bones, entry-level cars. The iPhone is not an entry-level, barebones phone. \

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And the Boxster is also no where close to price war territory.

It is... for a Porsche.

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No. We're simply talking about price segments and how none of the luxury items are in what you would call "a price war". The iPhone is still priced above that typical $200-$300 point for high end phone buyers given that most phones are free with contract and the Cingular 3125 and Blackjack and Pearl are all $99.

A market is a market is a market. Just because the iPhone is an upscale market, does not mean that it can't be aggressive on price. Why then did Jobs say "we really wanted to go for it for the holidays", regarding the price cut? If the iPhone is a true luxury item, then price cuts shouldn't matter.

The reason why your car comparison is, frankly, crap, is that phones really AREN'T luxury items. Even a relatively poor person can scrape together enough to buy an iPhone. But a poor or even middle-class person can't really save up for a Bentley, unless they wish to live in it. \